Tesla's deliveries beat 3Q expectations thanks to a rebound in Europe

Tesla’s third-quarter deliveries fell 2% but beat Wall Street expectations by a wide margin during a challenging period for the U.S. electric-vehicle market. The results suggest that the company’s core automotive business may be stabilizing after two years of declining annual sales, Reuters writes. Tesla shares gained 4.7% on Friday.

Tesla’s third-quarter deliveries declined 2% year over year to 486,532 vehicles, the company reported. Still, it was the company’s best quarter this year, and the figure was 5% above the average estimate of analysts surveyed by Bloomberg.

The deliveries were largely driven by a recovery in European demand, Reuters notes. In France, the Model Y became the best-selling car of any type for the first time. New Tesla registrations in the EU rose around 53% in August and 66% during the first eight months of the year, according to European Automobile Manufacturers’ Association data cited by Bloomberg.

Europe helped the company to offset weaker demand in the U.S. following the expiration of tax credits and intensifying competition in China. Tesla offered end-of-quarter discounts on the Model 3 and Model Y in the Chinese market. In August, around 41.9% of the EVs produced at the automaker’s Shanghai plant were shipped overseas, according to data from the China Passenger Car Association.

Analysts have raised their 2026 delivery forecasts for Tesla and now expect a 10% increase to 1.82 million vehicles, Reuters writes. “The strong numbers put Tesla on track for full-year deliveries growth following two years of declines,” Morningstar senior equity analyst Seth Goldstein said. “I point to FSD (full self-driving) as being a differentiator that drives consumers to choose Tesla over other autos.”

To surpass last year’s total, Tesla must deliver at least 311,448 vehicles in the fourth quarter, according to Visible Alpha analysts.

Tesla posted record sales in the third quarter of 2025, the period against which the latest results are being compared, as EV buyers rushed to take advantage of a $7,500 tax credit before it expired, Business Insider points out. The U.S. EV market has cratered since then. Sales in August were down 47% versus 2025, according to Cox Automotive data. Many automakers have rolled back their EV plans and pulled some models from the U.S. market.

Tesla has weathered the EV “winter” better than most competitors: it has increased its share of the U.S. market since the tax credit expired, while its second-quarter sales beat expectations by a wide margin, Business Insider writes. Nevertheless, Tesla shares suffered their worst day in a year on July 2, when the company released its second-quarter delivery figures. Tesla’s market value is off 17.6% year to date through Friday.

Although EV sales remain Tesla’s largest source of revenue, investors are increasingly looking beyond its automotive business to its robotics and autonomous-vehicle projects, Reuters writes. Business Insider reckons that their relatively slow progress is weighing on the stock.

Tesla’s robotaxi service remains well behind Alphabet-owned Waymo, which already provides commercial services in 10 U.S. cities and has a fleet of more than 4,000 autonomous vehicles, CNBC reports. According to Robotaxi Tracker estimates, Tesla has 332 EVs operating fully autonomously in six cities across Texas and Florida. Another 700 vehicles provide rides in San Francisco with safety monitors. In September, Tesla added its purpose-built Cybercab to the service in Austin, Texas.

The company is counting on expanding autonomous driving in Europe. The system is now approved in eight countries, and as Reuters notes, analysts expect its wider rollout to support Tesla’s sales. The automaker’s shares have gained 4.7% over the last month amid expectations that Elon Musk could combine Tesla with SpaceX, another of his companies.

According to the International Energy Agency’s May forecast, EVs will account for 28% of all new cars sold worldwide in 2026, up from 25% in 2025. The IEA attributed this partly to the conflict in Iran and the resulting surge in gasoline prices, which has strengthened the case for EVs as a way to address energy security and fuel-cost concerns.